Property Grunt

Friday, July 31, 2009

Something to think about for the weekend.

It seems everyday we are being hit up side the head with outlandish stories regarding Wall Street.

First was oen two punch coverage of Goldman Sachs.

Inside The Great American Bubble Machine

Tenacious G

Big Banks Paid Billions in Bonuses Amid Wall St. Crisis

And here is an interesting little article on TALP.

Property Bond Sales May Resume With $3 Billion

The central bank started TALF in March to help thaw credit by lending to investors who want to buy securities backed by auto and credit card loans. The $1 trillion program was expanded to include bonds backed by commercial mortgages. Investors who buy the securities submit them to TALF as collateral and the government lends the investor a percentage of the purchase price, subsidizing the investment.

Yeah. That sounds really stable.

I am sure there will be more bats**t insane stories regarding Wall Street in the coming months. But before we start breaking out the pitchforks and getting thegallows ready, I would like to share a true tale I recently heard. A tale that unfortunately commonly occurs in Wall Street. But the ending is straight out of an O'Henry story.

It is not a secret that many companies listed on the NASDAQ and NYSE are getting their asses handed to them. One particular company decided to take a pre-emptive strike to stem the bleeding by asking one of their own to cook the books so their stock wouldn't get hit as hard and still look presentable to their investors.

The man refused.

So it is not surprising that during the first round of layoffs, this man was part of that pool. Understandable. He wasn't willing to play ball, albeit, illegal ball, but ball nonetheless. So he had to go.

But it did not stop there. What happened next was far more brutal. You see his former company contacted all of his clients and their competitors and put the word on the street that this man should not be hired. He was bad news. In other words, he was black balled. It wasn't just a professional slap in the face but a slap in the face for his family that he was supporting.

Why pray tell would they do such a thing? It appears they wanted to make an example of him so none of the rank and file had any ideas about disobeying direct orders even if following those orders gave them a one way ticket to club fed.

After particularly horrible week, this man was talking to his minister about what he was dealing with. His minister made a joke about joining him in setting his old company's building on fire.

The man turned to him, looked him dead in the eye and said two words.

"No retribution."

After all that, he has no desire to walk the path of vengeance. Is it because he is a wuss? No. I have never met this man but already know he is stronger than most. And a lot smarter.

Which brings me to the the French Existentialist Jean-Paul Sartre who presents an interesting perspective on decisions. His perspective is that human beings are prisoners of choices we are forced to make in our lives. All of those past choices influence, shapes and limits the number and direction of our future choices until we put ourselves in a hole of inescapable thought and action. Therefore we are imprisoned in a realm that is shaped by the pattern of our past choices.

If this man plays Oldboy, he knows he will trapped within that narrative for the rest of his life. It is best for him to move on and forge a new and better narrative for himself.

As for his former company. They are f**ked. Remember the 800 lbs gorilla? Well, this is a bad time to sit wherever you want since the financial world is practically covered in mine fields.

The volatility of the world we live in is off the charts. The factions that eagerly embrace the mantra of do what you want will find themselves in a drowning pool. And when they ask for a hand to get out, the rest of the world will just clap.

As for the man who decided not to choose revenge. I salute you and pray that you see better times.

Wednesday, July 29, 2009

Far from over

The financial version of this is just around the corner.

This was posted yesterday.

Prepare for more foreclosures … many more

Published: July 28, 2009 - 3:01 pm

The deluge of home foreclosures swamping New York is nowhere near over, a report from the U.S. Government Accountability Office shows.

The GAO study released Tuesday predicts that the number of foreclosures on homes backed by subprime or low-documentation mortgages could easily double in the coming months or years, which could put tremendous pressure on housing prices throughout the city and suburbs.

Residents who took out subprime or low-doc loans to buy homes earlier this decade had defaulted or were delinquent on 53,000 loans in New York state through March 31, the GAO said. That dwarfs the 33,000 subprime or low-doc borrowers who had already completed foreclosure proceedings by the spring. At the time, banks had begun the foreclosure process on 28,000 homes backed by subprime or low-doc loans.

The bleak data are part of a national survey of “nonprime” mortgages prepared for Congress by the GAO. The study shows just how sloppy mortgage originators became during the housing boom. Of the 14.4 million mortgages provided between 2000 and 2007 to U.S. consumers with tarnished or poorly documented credit histories, 1.6 million had been foreclosed as of March 31, another 600,000 were in foreclosure proceedings and another 1.3 million were “seriously delinquent,” the GAO said.

Of course, some other states, such as California and Florida, face even worse problems than New York does. In Florida, the fourth-most-populous state, the proportion of subprime or low-doc mortgages in the foreclosure process is six times higher than New York’s.

But that will be of little comfort to New York City residents trying to sell their homes in areas already riddled with foreclosures, with more to come. The city’s eastern precincts, already pounded by foreclosures, seem likely to suffer the most. For example, in both the 6th Congressional District, which stretches from Jamaica, Queens, to JFK International Airport, and the 10th Congressional District, which goes east from downtown Brooklyn to Bedford-Stuyvesant and Canarsie, 35% of all active subprime or low-doc loans are deemed seriously delinquent.

This is a vicious cycle that is caused not just by the real estate meltdown but by unemployment, drop consumer spending and credit cards.

Then we have this:

SEC rule on 'naked' short-selling now permanent

WASHINGTON — Federal regulators on Monday made permanent an emergency rule aimed at reducing abusive short-selling, put in at the height of last fall's market turmoil.

The Securities and Exchange Commission announced that it took the action on the rule targeting so-called "naked" short-selling, which was due to expire Friday.

Short-sellers bet against a stock. They generally borrow a company's shares, sell them, and then buy them when the stock falls and return them to the lender — pocketing the difference in price.

Naked shorts is considered among the many factors that exacerbated last year's credit crisis.

This is just more evidence that buyers have every right to be as picky as possible. And it might be best simply to sit it out and watch everything implode. Then pick up the pieces when it is all over.

Sellers, unless there is an urgent need to move or need for money, it might be best just to wait it out till the next cycle comes.

If you are seller that is in dire need to dump your property, then you have no choice but to be extremely aggressive. Not just in the price but also in marketing. Especially if you hire a broker. Make that broker work for their commission. The broker has to advertise where the money is.

And where is the money?

As I have discussed in previous entries it is in China.

A Better Tomorrow

Peasants with money

Jews with Chopsticks

If your broker is only advertising through the New York Times and his company website then you are going to have a harder time to sell. Tell them to advertise in the Chinese newspapers and online resources where rich Chinese congregate. If they refuse, fire them and find someone who can.

Monday, July 27, 2009

Brother can you spare a tweet?

A family member gave me a heads up on a Twitter called HomelessINRYE. It is by a homeless man living by his wits as he dodges cops, searches for food and temporary shelter in the town of Rye. So why does he take shelter in this town? Because he once had a home there. It would be an understatement to say his tweets are sobering and honest.

Below are a selection of tweets that are of interest.

The purposes of churches in Rye.

RYE has 3 big churches that self flatter and do nothing for the people they are. RESSURECTION - PRESBYTERIAN & METHODIST churches of RYE 12:53 PM May 27th from Twitterrific

RYE loves it's big useless churches , they do nothing for the community or any outreach , all they do is comfort the rich woe is them 12:46 PM May 27th from Twitterrific

Observing the communications of people who engage in illicit activities in parking lots.

# You never really pay any attention to it untill you spend your night observing it and deciphering it all.8:25 PM Jun 29th from Twitterrific
And in turn the dealer above party city is honking warnings from the post road , it's actually quite an effective warning system8:24 PM Jun 29th from Twitterrific
I think the dealer honking from home depot lot is communicating with the guy behind staples across the rail tracks.8:23 PM Jun 29th from Twitterrific
1 honk is like a check to see if all is ok ... Hearing 1 honk in return signals it's all ok , 2 honks signals police patroling8:21 PM Jun 29th from Twitterrific
They use there horns to honk each other .. Like it's thier communication so far I have deduced 2 codes8:19 PM Jun 29th from Twitterrific
Parking lot over by khols in PC , is quite a funny place after hours , lots of parked cars with Johns in them , and mobile pot dealers8:18 PM Jun 29th from Twitterrific

The hazards of sleeping on a picnic table.

# 8:18 PM Jun 19th from Twitterrific
I stood up and made like a statue , closed my eyes to squint , 2 of them saw me move and paid no mind , they watched me and shuffled off8:16 PM Jun 19th from Twitterrific
I had a family of 3 skunks surround me in rye rec , I was passed out on top of a picnic bench , they were foraging below it when I got up8:15 PM Jun 19th from Twitterrific
Never move toward or jostle about keep still , they may even sniff at you , no eye contact either does this realy work you say well yes8:13 PM Jun 19th from Twitterrific
if a skunk sees you and moves toward you stand still , sknunks rarely spray when they initiate contact , they spray when startled or scared8:11 PM Jun 19th from Twitterrific

Homeless Survival

You kinda have to relearn your day , planning well in advance of rain, snow or bad weather sort of like living was 200 years ago3:48 AM May 27th from Twitterrific

Whatever it takes to avoid looking like a bag person , maintaing the look of normalcy is super hard work living on the street3:46 AM May 27th from Twitterrific

Find a self storage for your stuff, pay enough rent up front to keep your stuff stored even use it a a change room avoid lugging bags around3:43 AM May 27th from Twitterrific

There is an airport style washroom there , essential for staying washed ,it's large and secluded enough to strip down and wash3:39 AM May 27th from Twitterrific

The true nature of Rye.

i used to think this was a great town,until i lived it from shadows,then you really see how this town loves only those with money & stature.6:10 AM Jun 18th from web

that scene spell a lot of this out just right , even myself i never payed attention to people long enough to see suffering in their eyes5:55 AM Jun 18th from web
referring to the eloi & the morlocks..and how the beautiful people never see the wretches that lie just beneath the surface.5:54 AM Jun 18th from web
do you remember that movie with Mel Gibson... Ransom? well remember the conversation gary sinise had with Mel Gibson? about the rich?5:53 AM Jun 18th from web
there are poor in rye , there are disaffected in rye , but they would just as much shut it all out.5:49 AM Jun 18th from web
locals of rye never hold any drives or fund raisers to help improve things there,& they are fooled into thinking that rye doesn't have poor.5:47 AM Jun 18th from web
anything pertaining to reaching out to those in need, and right next door in port Chester there is deep poverty extant!, but guess what?5:45 AM Jun 18th from web
when you see posts like that of "MY RYE" what you are seeing are the outlets they have built for themselves, look close and you will not see5:44 AM Jun 18th from web
but because they have layered this community with the trappings of money & wealth this shuts me in ,and gives me no options for recovery5:43 AM Jun 18th from web
what this does to wretches like me is make me a "Shut in" , if i were kicked out of rye i would be a shut out & probably get help5:41 AM Jun 18th from web
what i do hate is how they add layers to this community that only serve themselves and their own interests5:40 AM Jun 18th from web
i want to establish the fact that i do not Hate rich people ,as some might get the perception from my posts5:39 AM Jun 18th from web
Myrye tweet is a window into the self absorbed ppl in this town , where is the posts about helping people ?12:04 AM Jun 18th from Twitterrific
The snobs come together .... For rye funny that, I was here before the snobs , RYE is infected with NYC snobs12:02 AM Jun 18th from Twitterrific
One post here has people in RYE trying desperately hard to maintain property values so high , invariably to keep certain people out of rye.12:00 AM Jun 18th from Twitterrific

The stress from homelessness.

Morning is here time to prepare for a useless day I feel like tom hanks in castaway talking to a volleyball I'm trying not to go insane 4:07 AM May 27th from Twitterrific

The futility of fundraisers in Rye

locals of rye never hold any drives or fund raisers to help improve things there,& they are fooled into thinking that rye doesn't have poor.5:47 AM Jun 18th from web

A strong sense of humor

I got to talking to one woman new to rye in sbucks she said she had to get out of NYC " too many homeless ppl" I laughed and chuckled a bit 11:53 PM Jun 17th from TweetDeck

What outreach really means.
Outreach means get them out of my million dollar hood.5:13 PM Jun 4th from Twitterrific


Have you ever had so much hatred toward another human bieng that at sight of them your body trembles with anger / rage / & intent?12:51 PM Jun 1st from web

Things to come
Lurking around small towns you can overhear things like never before the wealthy are so doomed and they don't even know it3:56 AM May 27th from Twitterrific

When I read the words of people who have fallen into the cracks of society, I find myself taking a very hard look at my own life. I realize how lucky I am for what I have and that I am grateful that the only problems that I have are ones that do not deal with starvation and lack of clean underwear and not having a roof over my head. I have also have no excuse for not achieving my goals because I do not face the daily problems that this man has to deal with.

HomelessINRYE if you are reading this, I am praying for you. Please keep up the tweets. It is important for everyone to know what is really happening out there.

Friday, July 24, 2009

Real Estate Chatter: What recovery?

Here is another batch of anecdotal chatter I have heard about the market.

If you are in the mood for good Korean food, take a drive up to Fort Lee. However, you better have a strong stomach for empty storefronts because the place is littered with them.

Another place where empty storefronts are becoming an epidemic is an exclusive enclave in a suburb of New York city. With the commercial market crashing and stories of foreclosures and desperate owners, one would think that these particular landlords would be pounding craigslist for tenants. However, finding tenants aren't a problem. It is just that no one can meet their price. You see the owners of these properties are a group of family dynasties who appear not only to have built up a huge reserve fund but also developed nerves of steel over the years. So now these storefronts have become homes for tumbleweeds as these dynasties wait for the next cycle to begin.

Seeing the real estate boom, a couple decided to roll the dice and start up a design oriented business that would cater with people with too much money and time on their hands. They picked a location that was flush with this particular population. Unfortunately, their timing was a little off since they established themselves during the final stage of the boom. And it appears they are learning that rich people can be just as stingy as everyone else during a downturn. Now this couple is running two business. The design firm and subletting the huge commercial space that they leased out.

Take it away Walter Cronkite.

Godspeed to you sir.

Tuesday, July 21, 2009

Even history isn't moving in this market.

No Bidders for Watergate Hotel

WASHINGTON (AP) -- The Watergate Hotel, part of the complex made famous by a presidential scandal, has failed to attract any bids at auction and has been taken back by the lender that holds the $40 million note on it.

PB Capital Corp. took back the property Tuesday after bidding opened at $25 million and there were no takers. The 30-day foreclosure notice, sent to hotel owner Monument Realty, expired Thursday.

Paul Cooper, vice president of the auction house, Alex Cooper Auctioneers, said about 10 bidders had registered for the auction and each gave a $1 million deposit.

The Watergate complex was made famous by the 1972 burglary that led to President Richard Nixon's resignation.

Another indicator of how bad this market is.

I'd hate to be a landlord right now

This is what a landlord in New York City is feeling.

This is in today's NYT.

Stores Go Dark Where Buyers Once Roamed

I see two takeaways.

“I’ve never seen such an across-the-board problem,” said Lorraine Nadel, a lawyer who has represented tenants and landlords for 18 years. “Store owners can’t pay their rent, and they can’t keep their businesses going.”

It has long been difficult to run a small business in Manhattan, but a number of struggling store owners cite high rents and their landlords’ unwillingness to negotiate as the leading obstacles to their survival.

“It’s a crisis,” said Stephen Null, director of the Coalition for Fair Business Rents, which has been promoting legislation to protect small businesses in lease negotiations since 1984. “Lease renewals are the single biggest killer of small businesses in New York City.

There are two reasons why landlords are charging insane rents.

1. The costs of being a landlord are going up. From higher taxes, mortgage payments and certain operating costs, everything just costs more.

2. With less tenants, they have to squeeze whatever remains of their tenant pool to make up the difference.

The closing of stores has started to chip away at the city’s tax collections. Sales tax revenues have declined by 3 percent through May, to $4.15 billion from $4.3 billion the year before, according to the city’s Office of Management and Budget.

This is very, very significant. During the last recession, Bloomberg carpet bombed landlords with taxes and other fees. Why? Because he could. Remember, real estate is illiquid. You can't move your building to Florida to avoid taxes.

And the say the recession is over?

Monday, July 20, 2009


Carnival of Real Estate

Greetings good people. I am just overwhelmed with the response for this week's CORE. I want to thank everyone for participating and Whitney for putting my name in the hat. Without further ado.

The order is what I received from earliest to latest.

Susan White presents 100 Non-Business Books Every Entrepreneur Should Read posted at Online

Handy Saputra presents Tips To Get Good Mortgage Rates. posted at Home Loan | Mortgage

Bob Schwartz, CRS,GRI presents Cap and Trade: Another Hurdle for the Housing Market | San Diego real estate market blog posted at San Diego real estate market blog.

Torrey presents Where are the Hard Money Lenders? posted at Hot Wholesale Rehabs.

Mark Menzella presents A Good Web Page posted at Realtors on the Internet.

Bruce Lemieux presents True Story: My Realtor Gave My Home Away posted at MoCo Real Estate.

Tim Johnson presents The Bursting of the Housing Myth Offers a Glimmer of Hope for the Relocation Industry posted at

Scott Sambucci presents Jumbo Mortgages and Housing Market Prices posted at How's The Market? Altos Research Blog.

Kevin Poulis presents – The Best Place To Start Your Real Estate Search posted at

ray presents Chase Credit Cards posted at free credit tips.

Mike Price presents "How Cool Is That?" - RE Barcamp 1 Year Later posted at MLBroadcast.Com Blog.

Julie Broad presents How to Have Someone Else Put $1900/Month Into YOUR Retirement Savings posted at Life as Real Estate Investors.

Ajay Mehta presents New Zillow Widget: When Will Real Estate Market Hit the Bottom? posted at Zillow Blog - Real Estate Market Stats, Celebrity Real Estate, and Zillow News.

Ben Roberts presents Advanced Home Marketing Stategies – A Primer | Day 2: Leveraging Traditional Web Exposure to Sell Homes posted at Exit Real Estate 540.

Debt Freedom Fighter presents Questions to Ask Your Realtor When Buying a Home posted at Discover Debt Freedom.

Savings Toolbox presents An Overview of No Deposit Mortgages posted at Savings Toolbox.

MatthewPaulson presents Ten Questions to Ask Your Mortgage Officer posted at Fine Tuned Finances.

Ray Taylor presents needs-and-benefits-of-insurance posted at Free Credit Tips.

Doug Willis presents I’ve got $300K, Do I Hear $325K….SOLD, the Real Estate Auction posted at Up2Date.

Silicon Valley Blogger presents The Real Estate Bust Around The Block posted at The Digerati Life.

Pinyo presents How To Find The Best Mortgage Rates posted at Moolanomy Personal Finance.

Dan Melson presents Some Offers Are More Equal Than Others posted at Searchlight Crusade.

Claudia Gonella presents Comparison shopping: An analysis of purchasing destinations for Nicaragua real estate posted at International real estate in Central America.

Handy Saputra presents No Closing Cost Mortgage Refinance - How can you Qualify posted at Home Loan | Mortgage Resources.

Ro Troia presents Important Mortgage Regulation Updates » Blog the Rockies posted at Blog the Rockies.

Friday, July 17, 2009

Last call: Carnival of Real Estate

Good people, I will be accepting submissions for CORE all weekend. Here is the link.

Law of unintended consequences

Yes. It is that crazy.

As I stated before there will be consequences for the rich going on the run.

Remember this quote.

Recessions, like bullies, always pick on the weak,

That's us folks.

Recently there were two incidents where street performers were arrested.

Video: Superman Arrested! Times Square Cops Cuff Man Of Steel With Zeal

Albeit, these guys apparently were acting like tools and they were busking for money which led to this.

Their comic-book adventure went awry when cops approached the dynamic duo on 43rd Street to see whether they had the required license to perform in costume in public, Frisoli said.

NSFW for language

Performance Artist Arrested In Central Park

The common element between these two is the lack of a permit. In order to get this permit you need to apply for one and pay a fee for it. You are caught without one, you have to pay a fine. See where I am going with this? Because of the lack of cash, the authorities are squeezing every dime by hauling people in for every technicality in the book.

If they are going after street performers then it means they are going after anyone that needs a permit to use the city streets. It is possible film students or anyone with a camcorder can be fined for filming in the city without a permit even if it is only for recreational use. Whether selling food or jewelry, street vendors who aren't licensed are going to be playing a game of cat and mouse with the authorities.It sounds improbable right? But already we are seeing street performers being hauled off.

And that this just the beginning as corporations across jump into the gouging.
Americans Pay Through The Nose

Which brings me to the Law of unintended consequences. These efforts to get money from the city might be causing more harm than good. According to reports Thoth was praying when he was hauled off. That is a possible violation of his religious freedom which could mean major lawsuits for the city. Even if it ends being settled out of court it is still going to cost the city money.

This is just an example of things to come because the law of unintended consequences is going to impact everyone.

Already those with means are already freaking out. Even if they have money they don't feel the vibes of being a master of the universe.

Right now millionaires are dropping like flies across the United States.

How Many Millionaires Did Your City Lose?

Like the World Wealth Report, Capgemini defines millionaires in this case as those with investible assets of $1 million or more, not including the value of primary residence. If we included primary real estate, the drops would likely be even steeper. Still, the data don’t make a distinction between pure wealth loss and rich emigration.

I bet they also did not make a distinction of millionaires who do not want to be even identified as millionaires.

Rich emigration
. Two words that should never come together in a capitalist society.

But we are going to hear more of it because this is becoming more of an unhealthy environment for the rich. Even Gawker is joining up with FNC by putting on the rich on notice. And they hate this guy.

Why America Now Supports Taxing the Rich

Polls tied to health-care reform show widespread support for taxing the wealthy to pay for wider coverage. A poll taken last month, and cited by the Wall Street Journal, showed 55% of respondents supported limiting tax deductions for the wealthy on charitable giving. (This is, in effect, a tax hike for the wealthy who give to charity).

House Democrats are coalescing around a plan to impose an income-tax surcharge on the wealthy who earn more than $200,000 or couples making $250,000 or more.

The tax hikes were widely expected. What’s not as easily explained to me is why (and whether) Americans have changed their minds about taxing the wealthy.

This has gone beyond emotional hijacking to mob mentality.

I want to get something quite clear. I am not picking sides. I am not for the rich or against Obama. I am just telling it how it is.

In the past I wrote about what Obama is up against and how he should proceed with his agenda He is acting exactly the way I predicted.

Obama is simply taking the offensive by not acting like a one term president but acting as if this is his last year in office. This is the time for him do it since he has the leverage and the political capital. An opportunity like this will never pop up again for him.

But his timing could not be worse. Demand has dropped in for US Treasuries and this health care plan of Obama's is even starting to freak out the nation's accountant.

Democrats’ Health Plans Raise Debt Concerns

WASHINGTON — The director of the nonpartisan Congressional Budget Office said Thursday that the health care legislation proposed so far would not curb the federal government’s runaway spending on medical care, and that lawmakers would need to take more forceful action to meet President Obama’s goal of controlling costs.

It gets better.

Director’s Blog: The Long-Term Budget Outlook

The demographic that Obama is focusing on to foot the bill have been talking to their people to prepare for this situation. And if they have not prepared for this, well they are putting together a stratagem to protect their money.

If they can't get their money for the rich to fund these programs, who do you think they will turn to next?

They will run.

Thursday, July 16, 2009

Just what we need in a depression. More taxes


July 16, 2009 --
Congressional plans to fund a massive health-care overhaul could have a job-killing effect on New York, creating a tax rate of nearly 60 percent for the state's top earners and possibly pressuring small-business owners to shed workers.

New York's top income bracket could reach as high as 57 percent -- rates not seen in three decades -- to pay for the massive health coverage proposed by House Democrats this week.

The top rate in New York City, home to many of the state's wealthiest people, would be 58.68 percent, the Washington-based Tax Foundation said in a report yesterday.

That means New York's top earners, small-business owners and most dynamic entrepreneurs will be facing new fees and penalties.

The $544 billion tax hike would violate one of President Obama's ironclad campaign promises: No family will pay higher tax rates than they would have paid in the 1990s.

Under the bill, three new tax brackets would be created for high earners, with a top rate of 45 percent for families making more than $1 million. That would be the highest income-tax rate since 1986, when the top rate was 50 percent.

The legislation is especially onerous for business owners, in part because it penalizes employers with a payroll bigger than $400,000 some 8 percent of wages if they don't offer health care.

But the cost of the buy-in to the program may be so prohibitive that it will dissuade owners from growing their businesses -- a scary prospect in the midst of a recession.

A democrat raising taxes. Big surprise. Obama has the leverage to pull this hat trick off. However is this the best time to do it?

Foreclosures rise 15 percent in first half of 2009

I am empathetic to the plight others regarding health care. It is kind of f**ked up when some people in one of the most powerful countries in the world can't even afford to get basic medical coverage. The reason why I sound so jaded is that despite Obama's best intentions, his objective, if it is ever reached, will probably be accomplished by hurting the people he is trying to help.

Getting change at the bank

Me: I would like this in singles.

Teller: Going to a strip club?

Me: In this economy? I don't think so.

Wednesday, July 15, 2009

No tax for you

If it could be only be this easy.

Mondayis it was reported that the State Department took a page out of Gerald Ford's book and told the city to drop dead when it comes to the collection of property taxes from foreign governments.


Bloomberg of coursed was pissed. Here are some key takeaways.

Bloomberg Slams Clinton: She Stabbed NYC In Back

The mayor was especially upset because the Hungarian mission had already written a check for $32 million when the State Department told them to cancel it.

The mayor also complained that the State Department owes the city $66 million for providing police security for United Nations missions.

It feels like old times when New York got squat when it came to anti-terrorism funds.

What's more, the mayor predicted that -- freed of paying property taxes -- some governments would see it as a business opportunity to buy up properties and make money renting them out.

"It's just patently unfair to New Yorkers and Americans and it contravenes established policy for 130-odd years and it just doesn't make sense," Bloomberg said.

This is exactly what I was thinking when I read what the State Department did. An industry around foreign owned properties has literally sprung up from this decision. Besides countries taking advantage of the situation to invest in New York real estate, I can perceive real estate developers and landlords networking with anyone who can't speak English properly.

A real estate developer could enter into a partnership with a foreign government so that the foreign government could own the property on paper while the developer could run it. A broker could sell a truckload of condos to a foreign government which could rent it out. There are a variety of complicated ways to do this and would cost a lot of money but in the end it would be quite profitable because real estate taxes would not have to be paid. The irony is that this could revitalize certain segments of the New York City real estate industry.

There are a variety of hot spots where rich people reside and America is often the destination for the flight of quality. For instance, if the s**t hits the fan in China, a lot of rich Chinese people are going to want to park their money somewhere safe. What is more safer than the USA?

Real estate taxes are a huge barrier to entry in New York City. Mention Bloomberg to any landlord and they will start frothing in the mouth in how much they have to pay the city. Any property that is free of real estate taxes is a guaranteed annuity.

Tuesday, July 14, 2009

The Rich: Like Black People in a horror movie

They will leave.
NSFW for language.

I recently wrote about the rich staging a tactical retreat.

It appears this trend is going to be more prevalent because the government is now taking a more aggressive stance to collect as much revenue from the rich in order to fund their programs.

Democrats Weigh Health Mandate as Obama Urges Taxing Wealthy

President Barack Obama wants Congress to consider taxing the wealthy instead of workers to pay for a health-care overhaul, as House Democrats discuss a plan to require health insurance for most Americans.

The Obama administration are also making every effort to go after the major tax havens that the rich flock to in order to protect their money.

US, Swiss ask for delay in UBS secrecy case

As the following video attests, Obama is not f**king around.

However, the rich have their ways to protect themselves as the following story demonstrates.

Mr. Pamplin fell in love with Shaniko, Oregon. Being a man of means he desire to use his resources to revitalize the area however it did not work out the way he or anyone else wanted.

A Lonesome Oregon Ghost Town May Remain So

But not long after he renovated the hotel and other structures, Mr. Pamplin, 67, decided he needed more water and assurances that it would be clean. The municipal water supply has long been fragile; if its use goes up too fast, the pressure drops and the water becomes vulnerable to contamination.

So Mr. Pamplin had a well dug near the old barn. Residents were stunned at what happened next: water gushed up at more than 250 gallons per minute.

“He got more water than they’d ever seen,” said Keith Mobley, a lawyer who grew up on a ranch north of town and represented Shaniko in some of its dealings with Mr. Pamplin. “He just has the magic touch.”

Still, Mr. Pamplin needed easements from the town to draw water to his properties. But the town, after consulting with the state, decided that the well should also serve the rest of Shaniko, as the municipal water supply. The town said it would allow the easements if Mr. Pamplin also contributed $2,000 a month for five years to help pay for operating the system. An agreement appeared to be in place.

But there was a hitch. Mr. Pamplin asked the town to allow an unspecified amount of residential development, ostensibly to provide housing for workers at the hotel and cafe and elsewhere. Some accounts say he wanted to build up to 35 homes. A historic district could have been affected. New buildings might have blocked views of high-desert hills for the few homes here.

“We were like, ‘What’s your plan? What’s your vision?’ ” said the town recorder, Debra Holbrook, who has led the opposition to Mr. Pamplin. “He would never tell us what his ultimate plan was.”

Early last year, the Shaniko City Council voted not to allow Mr. Pamplin to go forward with some of his plans. He responded by closing the hotel and cafe, capping the well and putting up the “for sale” signs.

Mr. Pamplin, who lives in Lake Oswego, a suburb of Portland about a three-hour drive from here, could not be reached for comment. A lawyer for him, Richard Canaday, said Mr. Pamplin had only wanted the town “to commit to grow enough so that you can support yourself.”

Mr. Pamplin is indicative of the attitude of the rich which is simply if the game isn’t going their way. They will forfeit and go elsewhere. When it comes to money, retreating is not an act of cowardice and machismo has no use if it means lowering your net worth.

It is near impossible to keep the rich boxed in. They already had a hankering that Obama or another Democrat was going to be in the White House so they instituted the proper countermeasures to deal with the situation. If it means becoming an expatriate, so be it. It worked for Marc Rich and he got a pardon to boot.

There will be consequences. But not for them.

Monday, July 13, 2009

Panic Fire

Edwards: Why the big secret? People are smart. They can handle it.
Kay: A person is smart. People are dumb, panicky dangerous animals and you know it. Fifteen hundred years ago everybody knew the Earth was the center of the universe. Five hundred years ago, everybody knew the Earth was flat, and fifteen minutes ago, you knew that humans were alone on this planet. Imagine what you'll know tomorrow.

Men In Black

The quote from MIB perfectly describes the mentality of the real estate market. Everyone is freaking out and has no idea what is around the corner. How will this shakeout? When will end come?

According to Time Magazine things are getting worse out there.
Housing Woes: Price Reductions Are Proliferating

Which brings me to New York Magazine's article The Billyburg Bust, has made the blogging rounds. And when the Williamsburg condo market is compared to the Miami, well it is definitely s**tastic. However one advantage of Miami is that they have better laws protecting assets.

There are two aspects of this article that are of interest to me. The first is the primary reason why there such a huge boom in Brooklyn.

Like many people in the real-estate industry I spoke to, Maundrell placed blame for this implosion on the city as much as the hubris of developers. The �inclusionary zoning� plan of 2005 was passed largely to foster the revival of the neighborhood’s waterfront, where developers would be allowed build as high as 40 stories�and receive huge tax breaks�so long as they dedicated a portion of their building to low-income housing. But in reality, most new construction ended up inland, where developers could receive the same benefits on smaller buildings without having to set aside affordable units.

Recognizing this design flaw, the city amended its tax-abatement program in June 2008 to require all new buildings, no matter how small, to devote 20 percent of their units to affordable housing. �That 20 percent? It’s a developer’s profits,� Maundrell said as we parked outside a vacant lot on North 10th Street. �What the city did is they forced all these guys to take down the existing building and drive the pile��in other words, to rush construction far enough along that the development would not be subject to the new rules. �Most of them did it with their own money, or they took a hard-money loan at some outrageous interest rate. Well, that was just as the banks stopped lending. It was like Armageddon. You had the city looming, you had to take down your old building, and then�poof!�there was no money.� He sighed. �So here we are, everyone asking the same question: What the hell is going to happen?

Tax-abatements are a huge deal in New York City. Landlords and developers will fight tooth and nail for abatements. However I do not have any sympathy for these developers. In real estate three letters rule all. OPM. Other People's Money. You never use your own cash to finance a development. The property in question is what is held hostage.

If you enter the hard lending fray, you better be willing to be as vicious as hell. I know of one well known real estate developer and landlord who has reputation of being a provider of substandard affordable housing. That is not by accident. Back in the 80's when the market imploded, this developer had nowhere else to go for financing and had no choice but to go to private lenders who charge insane amounts of interests for the privilege of using their money. This developer fought tooth and nail to lower his operating expenses which is why he was so despised by his tenants. The term "hard money" should not be taken lightly because it means one has to look at the possibility of detaching any type of sympathetic emotion in their mind.

So what could have these developers have done? They could have been like this guy.

In the world of real estate, one developer’s misfortune tends to be another’s opportunity. Among those closely following the status of buildings like Warehouse 11 is Jamie Wiseman, a laid-back 33-year-old who is not what most people think of when they think about real-estate developers. A self-described �recovering lawyer� who favors stenciled T-shirts, Wiseman lives with a roommate in a small apartment in Bushwick, where over the past few years he has made a modest living buying up nondescript buildings and turning them into rentals and condos.

In November 2007, he made his first foray into Williamsburg, when, along with his business partner, Jacob Sacks, he purchased an abandoned factory at 44 Berry Street for $12.7 million. During the height of the market, the building would have been far out of his price range; in fact, it was in the process of being sold for $15 million to a California-based conglomerate called Atherton-Newport Investments, which planned a luxury-condo conversion. That deal fell apart last January, when Atherton filed for bankruptcy.

�They’d already put down a nonrefundable deposit of a million dollars, so the owner was willing to cut us a deal,� Wiseman told me on a recent afternoon, as we stood outside the building along with the project’s development manager, a 25-year-old named Ari Heckman. �The biggest difference between us and most of the developers out there is we’re not building apartments based on the fantasy that Williamsburg is where bankers want to live. Basically, what we’re doing is creating places for the people who live here now.

These particular developers had the patience and understanding who understood their market and had the patience to wait for the opportunities that would arise for them.

Awhile back I did an entry on Brooklyn
Gentrification Wars: The Battle of Brooklyn

The word "hipster" is something I find extremely pretentious. I actually met a girl who identified herself as one with a smug arrogance. In my opinion it is akin to calling someone from California a Valley Girl. This population at one point felt like they were being squeezed out of Williamsburg, however with the changes in the market, It hink they will be sticking around for awhile.

Wrong person to mess with.

This was from the Angry Asian Man.

Here is the rundown.

am a Korean-American attorney who lives on Wall Street in the Financial District of NY. I was out getting some icecream late at night at the corner store when I was approached by a big drunk guy who asked me if I was Korean. He went on to tell me that his wife is Korean so he "knows all about Koreans". I tried to humor him and nod but he started getting offensive saying that Koreans get pushed around all the time but never fight back. Then he started telling me all Korean parents are insane.

At that point, I told him I didn't want to continue talking to him and left the store. He followed me out onto a dark street off of Wall Street and started getting in my face. I told him to take a step back and he socked me in the face. I used to box in college so I responded with a pretty brutal set of punches that put him on the ground and told him the fight was over.

As I walked away, he got up and followed me into my apartment building at 63 Wall Street. I tried to get the doorman to call the police but he refused because apparently the guy lives in the building. The drunk guy then came at me again and hit me in the mouth, breaking one of my front teeth off, and called me a chink. We ended up fighting on the ground where I subdued him using Brazilian Jiujutsu and MMA. I held him in a chokehold and told him I'd kill him before the police arrive if he didn't stop struggling and clawing at my eyes.

Besides the obvious stupidity of this incident, what really annoys me is how the doorman acted. On rare occasions the doorman has to play bouncer in order to keep the peace in a building. That is part of their job. A good doorman will make an effort to defuse the situation before it gets out of hand. And if it means to call the cops so be it. As for the doorman claiming he can't get involved because the attacker was a tenant is complete bulls**t.

Now everyone involved is f**ked. The victim is completely in the right and along with the video evidence, he is also an attorney which means he will eviscerate his attacker and the landlord through every legal channel.

And if the doorman hasn't doorman has not been fired, he will be.

Taking a break

Greetings good people-

I had a very wild weekend. Wild in a great way. I will post about it in the near future. However I have not been able to blog as much. I should be back in the swing of things by tomorrow.

Friday, July 10, 2009

Barack O Butt?

Whether it was intentional or not, there is part of me that wishes that he slapped her on the ass.

Tuesday, July 07, 2009

Carnival Countdown

It is a little early but I am announcing a Carnival of Real Estate for July 20th. I will be accepting all links as of now till the 19th. Please email them to propertygrunt (at)

I have two requirements.

1. Please do not spam. Write something that has some type of relevance in this market and send me the link to your blog.

2. Please be patient with me. Last time I did this a bunch of emails got caught in my spam filter. So I will be watching everything very closely.

Thank you. See you on the 20th.

Monday, July 06, 2009

The Woman in Red

After partaking the fireworks, together with an amigo we sauntered over to the local bijou to enjoy the visionary genius of Michael Mann's Public Enemies which details the final days of John Dillinger and Melvin Purvis's hunt for the infamous bank robber.

Michael Mann painstakingly assembles these bank robbery scenes which allows the audience to appreciate Dillinger's professionalism.

If you look past the fact Dillinger was a bank robber, you can appreciate the effort he put into his work. His bank robberies were military precise K.I.S.S simple operations in order to limit the body count and to minimize the overall risk of being caught.

Dillinger was mentored by Walter Dietrich another master bank robber who impresses several rules upon Dillinger. One of them is never work with desperate people. Which unfortunately Dillinger has to break in order to do a job. The irony is that a desperate person plays a role in his demise.

Dillinger was killed because of Ana Cumpănaş AKA Woman in Red. The screws were put into Ana real tight because she was on the verge of being deported as being alien of low moral character".

Desperate to stay in America, she turned on Dillinger in hopes of sticking around, she contacted the Feds to set Dillinger up for a take down. The irony is that despite her cooperation she ended up getting booted out of the land of the free.

In this real estate market it is imperative for everyone to keep a cool head. This is an environment where one slip up could be fatal. Spot a deal, make sure it is for real. If you can get financing, make sure it is rock solid. Due diligence is now your mantra. Desperation only attracts weakness and just excites the predators that will come for you. Play it close to the vest and keep walking with your head up high and the vultures will fly to the next carcass.

The Woman in Red stalks the real estate industry and she pops up in the most inopportune times. Keep an eye out for the Woman in Red by being aware of the wants and needs of others and how far they are willing to go. Then take measures to protect your interests.

Someone gets offended? F**k em. The world we live in is short on politeness but long on pain. Do not be afraid to walk away if you get that funny feeling about someone or something. Listen to your gut. Lose a deal? So what. There are plenty of deals out there. Sit on the sidelines? Go ahead. Everyone else is.

Just beware the Woman in Red.

Unless it is Kelly LeBrock.

Friday, July 03, 2009

Yellow Alert

In a past entry I wrote about Scarsdale entering the foreclosure arena staying stable at green. Well it appears that Scarsdale has gone from green to yellow. According Hotpads color codes that means foreclosures have increased in Scarsdale.

For what it's worth which isn't much these days it was recently reported that Scarsdale received a triple A bond rating from Moody's.

Go home early folks, eat a hot dog and have a beer. Just forget everything this weekend.

Thursday, July 02, 2009

Happy Forecl....4th of July

It looks a little better but it's still bad. Below is the summary sent to me by Propertyshark.

*New foreclosures in New York City (892) down 7% compared to Q2 2008 (962) and up 3% over Q1 2009 (869).

*Compared to Q2 2008, new foreclosures were down 57% in Brooklyn, down 39% in Manhattan and down 5% in The Bronx and Staten Island. Queens (up 9%) was the only borough recording an increase over the same time period.

*Compared to Q1 2009, new foreclosures dropped by 26% in the Bronx and decreased by 17% in Staten Island. Brooklyn recorded the highest increase, going up 92%, while foreclosures in Manhattan went up 35%, and Queens saw a 5% increase in new foreclosures.

*Queens had the highest rate of foreclosures per household in Q2 2009, with one in every 1,270 homes scheduled for auction, followed by Staten Island with one in every 1,435 homes scheduled for auction. The rate in Manhattan was the lowest, with one in every 31,826 homes scheduled for auction.

*Queens accounted for fourteen of the fifteen zip codes with the highest number of new foreclosures in Q2 2009.

They also sent me some links to maps and some funky graphs.



If you are looking for some type of dramatic insight, well I got nothing. All I know it be awhile before things shake out. Honestly folks, this is one of those situations where you have to roll with the punches, no matter how many are thrown your way.

Peer Pressure

Beginning of the month and everyone else is doing it. Since I am really lazy I am just going to link the news to Curbed.

Thursday AM Linkage: Market Report Misery Edition

Here's Jonathan Miller's take.

Mr. Miller said that at best, the market would move sideways. “We will probably get a little worse before it is going to get better,” he said, “because unemployment is likely to continue to rise after the recession ends this year.”

I do not know where the bottom will be but from what I understand once it hits, it won't just bounce right back up. As I have stated before, try and wait it out, but if you see a great deal go for it.

London Calling, calling for money.

It is no surprise that the British economy appears to be reliving the American Revolution.

UK economy suffers its biggest quarterly decline in 50 years

And I can confirm that this is having some type of impact on certain segments of the Manhattan real estate market. Last weekend the Grunt was literally dragged off the streets by a hard charging broker to see a desperate listing. The broker explained to the Grunt that the owner lived in England and was in desperate need of cash. They were so desperate that they needed to sell their apartment within 48 hours. In order to entice sellers took a 30% cut price cut. After seeing the apartment, I realized that the owners must be in serious financial straits because in a normal market their apartment would probably go for at least twice the asking price.

So check if the sellers are from England or living there. It might provide you with extra leverage during the negotiations.